Payson digging out of deficit as revenue rises and furloughs cut costs

Payson’s bleak budget picture brightened in February, according to a financial report released on Monday.

The deficit narrowed significantly in February, thanks to a rise in tax revenue and a $150,000 savings as a result of the two-day-month furlough of town workers.

In January, the projected deficit had gaped open to $579,000, which the town planned to cover with a $1 million loan from the water department.

But in February, the projected deficit had narrowed to $330,000.

“The decrease in the deficit is due to revenues exceeding expenditures by $248,000 in the month of February,” wrote Chief Financial Officer Cindy Smith in her monthly, 23-page budget tracking report.

“If that trend continues, there will be a balance of around $600,000 before transfers out ... These numbers do not take into consideration the potential $1 million loan from the Water Fund.”

When sales tax and other revenues plunged in November and December, the council approved a series of cuts — including furloughs that amounted to a 12 percent to 15 percent salary reduction for town employees, who also had to pay an extra $1,000 for health insurance.

However, both the January and February sales tax revenues recovered, nearly reaching last year’s levels.

Payson’s local sales tax receipts rose sharply from January to $486,098. However, that still remained 10 percent below projections. As of the end of January, the town had collected $3.4 million in local sales tax, a decline of about $500,000 from the previous year.

Nearly every revenue source remains lower than last year — but usually not by much. The report showed both monthly and annual declines in urban revenue sharing, state-shared sales tax, vehicle license taxes, building permit fees, and plan review fees. The sole exception for the general fund came in the form of a $48,000 year-to-date increase in gas tax money coming from the state.

The small but real improvement in the February numbers represented the second piece of good budget news in a week for the struggling Payson budget. Last week, voters resoundingly approved Home Rule, which allowed the town to continue to spend above a state budget limit. If voters had rejected Home Rule, Payson would have been forced to cut spending by about 60 percent.

The council cut town spending in adopting the 2009-10 budget. But the department heads have kept actual spending well below those adopted levels. In February alone, the budget called for $1.1 million in general fund spending, but the town spent only $719,000.

Most departments remain substantially below the projected budget for this point in the fiscal year. The parks and recreation budget set the record for the tightest spending, having spent only 52 percent of its budget with 67 percent of the year gone.

The police and fire departments, which account for more than half of total general fund spending continue to run slightly below budget for the year.

The only departments so far running at least slightly ahead of their budgeted totals are the town manager, the magistrate court and the IT computers department. Town Manager Debra Galbraith was exempted from the furlough so that she could fill in for furloughed department heads.

The state provides the town with sales tax totals by category, but those category breakdowns come a month later than the overall numbers.

That means the sales figures by category included in the February report reflect sales in January.

Construction remains the epicenter of the downturn — dropping from $635,000 to $272,000 for the July to January period.

The tourist industry also suffered, with a 17 percent drop in accommodations — to $144,000.

have kept actual spending well below those adopted levels. In February alone, the budget called for $1.1 million in general fund spending, but the town spent only $719,000.

Most departments remain substantially below the projected budget for this point in the fiscal year. The parks and recreation budget set the record for the tightest spending, having spent only 52 percent of its budget with 67 percent of the year gone.

The police and fire departments, which account for more than half of total general fund spending continue to run slightly below budget for the year.

The only departments so far running at least slightly ahead of their budgeted totals are the town manager, the magistrate court and the IT computers department. Town Manager Debra Galbraith was exempted from the furlough so that she could fill in for furloughed department heads.

The state provides the town with sales tax totals by category, but those category breakdowns come a month later than the overall numbers.

That means the sales figures by category included in the February report reflect sales in January.

Construction remains the epicenter of the downturn — dropping from $635,000 to $272,000 for the July to January period.

The tourist industry also suffered, with a 17 percent drop in accommodations — to $144,000.